Iron ore futures drifted lower on Tuesday, with more maintenance work among Chinese steelmakers dampening demand, although low inventory and winter restocking capped losses.

The most-traded May iron ore on China's Dalian Commodity Exchange (DCE) DCIOcv1 ended daytime trading 0.11% lower at 923 yuan ($129.15) a metric ton.

The benchmark January iron ore SZZFF4 on the Singapore Exchange was down 0.25% at $132.15 a ton, as of 0655 GMT.

"An increasing number of steel mills have recently implemented maintenance on blast furnaces amid thinning margins, weighing on demand for raw materials as well as their prices," said Chu Xinli, a Shanghai-based analyst at China Futures.

As of Dec. 15, blast furnace operating rate among mills surveyed dropped by 3.3% to 78.31% month-on-month, data from consultancy Mysteel showed.

Growing domestic supply also weighed on prices of the key steelmaking ingredient.

Other steelmaking ingredients on the DCE were mixed, with coking coal DJMcv1 up 0.48% while coke DCJcv1 was little moved.

Steel benchmarks on the Shanghai Futures Exchange broadly advanced, underpinned by reduced supply due to mounting equipment maintenance among mills as well as the anticipated wave of buying from steel traders who bet prices to rise after the Lunar New Year holiday break.

Rebar SRBcv1 added 0.23%, hot-rolled coil SHHCcv1gained 0.32%, and stainless steel SHSScv1 rose 0.99%.

Wire rod SWRcv1 was little changed.

"The heavy snow in many regions in north China have disrupted logistics and caused steel stocks at mills to pile up," analysts at Everbright Futures said in a note.

Local traders appeared to show scant response shortly after Japan's Nippon Steel5401.T, the world's fourth-largest steelmaker, announced plans on Monday to clinch a deal to buy U.S. Steel X.N for $14.9 billion in cash.

Source: Reuters